KFAR SAVA, Israel, July 25, 2019 /PRNewswire/ -- Silicom Ltd.
(NASDAQ: SILC), a leading provider of high-performance
networking and data infrastructure solutions, today reported its
financial results for the second quarter and first half ended
June 30, 2019.
Financial Results
Second Quarter: Silicom's revenues for the second
quarter of 2019 totalled $25.4
million compared with $27.6
million for the second quarter of 2018.
On a GAAP basis, net income for the quarter totalled
$2.3 million, or $0.30 per share (basic and diluted), compared
with $2.4 million, or $0.32 per share (basic and diluted), for the
second quarter of 2018.
On a non-GAAP basis (as described and reconciled below), net
income for the quarter totalled $2.9
million, or $0.38 per share
(basic and diluted), compared with $3.4
million, or $0.44 per diluted
share ($0.45 per basic share), for
the second quarter of 2018.
First Six Months: Silicom's revenues for the first
half of 2019 totalled $55.6 million
compared with $57.1 million for the
first half of 2018.
On a GAAP basis, net income for the period totalled $5.9 million, or $0.77 per diluted share ($0.78 per basic share), compared with
$1.0 million, or $0.13 per share (basic and diluted), for the
first half of 2018.
On a non-GAAP basis (as described and reconciled below), net
income for the period totalled $6.9
million, or $0.91 per share
(basic and diluted), compared with $7.7
million, or $1.00 per diluted
share ($1.02 per basic share), for
the first half of 2018.
Guidance for the Third Quarter
Management projects that revenues for the third quarter of 2019
will total $24 to $25 million.
Comments of Management
Shaike Orbach, Silicom's
President and CEO, commented, "We are pleased to
report another solid quarter with revenues in line with our
guidance, continued profitability and cash generation. While our
short term visibility remains low due to the unclear ramp-up timing
and patterns of a few of our major SD-WAN and NFV design wins, we
are encouraged by the significant growth in the quantity of our
SD-WAN systems that are being deployed through our customers in the
market. Unfortunately, this growth is not yet reflected in our
top-line revenues due to the excess inventory accumulated by one of
our major SD-WAN customers, resulting in a delay of planned orders.
We believe that once this excess inventory is depleted and the
ramp-up rate of a few of our existing Design Wins progresses, our
overall revenues will return to growth in 2020, even before winning
new business.
"In parallel, we remain strongly confident about the potential
of our FPGA and SD-WAN product lines as long-term revenue drivers
that will add fuel to our growth. Momentum for these offerings has
already started to build: we announced several FPGA wins that will
begin to translate into revenues next year, and we are working to
transform a significant portion of our FPGA and SD-WAN pipeline
into new wins. At the same time, we continue to invest in expanding
our technological lead in the space. The availability of our unique
Packet Mover and other FPGA capabilities has already begun
attracting interest from clients beyond our traditional Cloud/Data
Center/Networking target markets, as demonstrated by a technology
giant's selection of Silicom to design a customized 400G FPGA
networking card. Any wins in these additional target markets will
add to the significant potential of our wins in the Cloud/Data
Center/Networking markets, which remain the focus of our investment
and activities. In parallel, the launch of our powerful new
Intel Xeon-D (D2100)-based Edge Computing Platform for streamlining
the deployment of white box services opens up opportunities in the
high-potential Edge Computing market."
Mr. Orbach continued, "As a long-term player, we continue to
invest in developing our client relationships, technology and
products. With a strong balance sheet, growing markets, a superior
product portfolio and excellent customer relationships, we are well
positioned and confident in our prospects."
Conference Call Details
Silicom's Management will host an interactive conference today,
July 25th, at 9am Eastern Time (6am
Pacific Time, 4pm Israel Time)
to review and discuss the results.
To participate, please call one of the following
teleconferencing numbers. Please begin placing your calls at least
10 minutes before the conference call commences. If you are unable
to connect using the toll-free numbers, try the international
dial-in number.
US: 1 888 668 9141
UK: 0 800-917-5108
ISRAEL: 03 918 0609
INTERNATIONAL: +972 3 918 0609
At: 9:00am Eastern Time,
6:00am Pacific Time, 4:00pm Israel Time
For those unable to listen to the live call, a replay of the
call will be available for three months from the day after the call
under the investor relations section of Silicom's website.
Non-GAAP Financial Measures
This release, including the financial tables below, presents
other financial information that may be considered "non-GAAP
financial measures" under Regulation G and related reporting
requirements promulgated by the Securities and Exchange Commission
as they apply to our company. These non-GAAP financial measures
exclude compensation expenses in respect of options and RSUs
granted to directors, officers and employees, amortization of
acquired intangible assets, taxes on amortization of acquired
intangible assets, as well as discontinued project-related
write-offs. Non-GAAP financial measures should be evaluated in
conjunction with, and are not a substitute for, GAAP financial
measures. The tables also present the GAAP financial measures,
which are most comparable to the non-GAAP financial measures as
well as reconciliation between the non-GAAP financial measures and
the most comparable GAAP financial measures. The non-GAAP financial
information presented herein should not be considered in isolation
from or as a substitute for operating income, net income or per
share data prepared in accordance with GAAP.
About Silicom
Silicom Ltd. is an industry-leading provider of high-performance
networking and data infrastructure solutions. Designed primarily to
improve performance and efficiency in Cloud and Data Center
environments, Silicom's solutions increase throughput, decrease
latency and boost the performance of servers and networking
appliances, the infrastructure backbone that enables advanced Cloud
architectures and leading technologies like NFV, SD-WAN and Cyber
Security. Our innovative solutions for high-density networking,
high-speed fabric switching, offloading and acceleration, which
utilize a range of cutting-edge silicon technologies as well as
FPGA-based solutions, are ideal for scaling-up and scaling-out
cloud infrastructures.
Silicom products are used by major Cloud players, service
providers, telcos and OEMs as components of their infrastructure
offerings, including both add-on adapters in the Data Center and
stand-alone virtualized/universal CPE devices at the edge.
Silicom's long-term, trusted relationships with more than 150
customers throughout the world, its more than 400 active Design
Wins and more than 300 product SKUs have made Silicom a "go-to"
connectivity/performance partner of choice for technology leaders
around the globe.
For more information, please visit: www.silicom.co.il
Statements in this press release which are not historical data
are forward-looking statements which involve known and unknown
risks, uncertainties, or other factors not under the company's
control, which may cause actual results, performance, or
achievements of the company to be materially different from the
results, performance, or other expectations implied by these
forward-looking statements. These factors include, but are not
limited to, Silicom's increasing dependence for substantial revenue
growth on a limited number of customers in the evolving
cloud-based, SD-WAN, NFV and Edge markets, the speed and extent to
which solutions are adopted by these markets, likelihood that
Silicom will rely increasingly on customers which provide solutions
in these evolving markets, resulting in an increasing dependence on
a smaller number of larger customers, difficulty in commercializing
and marketing of Silicom's products and services, maintaining and
protecting brand recognition, protection of intellectual property,
competition and other factors detailed in the company's periodic
filings with the Securities and Exchange Commission. These
forward-looking statements can generally be identified as such
because the context of the statement will include words, such as
"expects," "should," "believes," "anticipates" or words of similar
import. Similarly, statements that describe future plans,
objectives or goals are also forward-looking statements. In light
of significant risks and uncertainties inherent in forward-looking
statements, the inclusion of such statements should not be regarded
as a representation by the company that it will achieve such
forward-looking statements. The company disclaims any duty to
update such statements, whether as a result of new information,
future events, or otherwise.
-- FINANCIAL TABLES FOLLOW –
Silicom Ltd.
Consolidated Balance Sheets
|
|
(US$
thousands)
|
|
|
June
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
14,467
|
|
$
|
26,808
|
Short-term bank
deposits
|
|
13,507
|
|
|
-
|
Marketable
securities
|
|
5,916
|
|
|
1,600
|
Accounts receivables:
Trade, net
|
|
22,046
|
|
|
23,817
|
Accounts receivables:
Other
|
|
7,451
|
|
|
9,487
|
Inventories
|
|
34,245
|
|
|
42,369
|
Total current
assets
|
|
97,632
|
|
|
104,081
|
|
|
|
|
|
|
Marketable
securities
|
|
53,513
|
|
|
45,612
|
Assets held for
employees' severance benefits
|
|
1,628
|
|
|
1,517
|
Deferred tax
assets
|
|
1,719
|
|
|
894
|
Property, plant
and equipment, net
|
|
3,611
|
|
|
3,670
|
Intangible assets,
net
|
|
1,334
|
|
|
966
|
Right of
Use
|
|
3,615
|
|
|
-
|
Goodwill
|
|
25,561
|
|
|
25,561
|
Total
assets
|
$
|
188,613
|
|
$
|
182,301
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
$
|
11,384
|
|
$
|
15,407
|
Other accounts
payable and accrued expenses
|
|
6,631
|
|
|
6,133
|
Lease
Liabilities
|
|
1,399
|
|
|
-
|
|
|
|
|
|
|
Total current
liabilities
|
|
19,414
|
|
|
21,540
|
|
|
|
|
|
|
Lease
Liabilities
|
|
2,140
|
|
|
-
|
Liability for
employees' severance benefits
|
|
2,868
|
|
|
2,612
|
|
|
|
|
|
|
Total
liabilities
|
|
24,422
|
|
|
24,152
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary shares and
additional paid-in capital
|
|
55,920
|
|
|
54,643
|
Treasury
shares
|
|
(1,191)
|
|
|
(38)
|
Retained
earnings
|
|
109,462
|
|
|
103,544
|
Total
shareholders' equity
|
|
164,191
|
|
|
158,149
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
188,613
|
|
$
|
182,301
|
Silicom Ltd.
Consolidated Statements of Operations
|
|
(US$ thousands,
except for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-month
period
|
|
Six-month
period
|
|
ended June
30,
|
|
ended June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Sales
|
$
|
25,402
|
|
$
|
27,603
|
|
$
|
55,629
|
|
$
|
57,125
|
Cost of
sales
|
|
16,728
|
|
|
18,714
|
|
|
36,775
|
|
|
43,686
|
Gross
profit
|
|
8,674
|
|
|
8,889
|
|
|
18,854
|
|
|
13,439
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
3,659
|
|
|
3,647
|
|
|
7,479
|
|
|
7,078
|
Selling and marketing
expenses
|
|
1,692
|
|
|
1,596
|
|
|
3,321
|
|
|
3,132
|
General and
administrative expenses
|
|
1,054
|
|
|
1,068
|
|
|
2,077
|
|
|
1,975
|
Total operating
expenses
|
|
6,405
|
|
|
6,311
|
|
|
12,877
|
|
|
12,185
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
2,269
|
|
|
2,578
|
|
|
5,977
|
|
|
1,254
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income,
net
|
|
430
|
|
|
200
|
|
|
725
|
|
|
484
|
Income (Loss) before
income taxes
|
|
2,699
|
|
|
2,778
|
|
|
6,702
|
|
|
1,738
|
Income
taxes
|
|
421
|
|
|
342
|
|
|
784
|
|
|
741
|
Net income
(loss)
|
$
|
2,278
|
|
$
|
2,436
|
|
$
|
5,918
|
|
$
|
997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss)
per ordinary share (US$)
|
$
|
0.30
|
|
$
|
0.32
|
|
$
|
0.78
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to
compute basic income per share (in thousands)
|
|
7,587
|
|
|
7,550
|
|
|
7,587
|
|
|
7,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per ordinary share (US$)
|
$
|
0.30
|
|
$
|
0.32
|
|
$
|
0.77
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to
compute diluted income per share (in thousands)
|
|
7,635
|
|
|
7,629
|
|
|
7,644
|
|
|
7,671
|
Silicom Ltd.
Reconciliation of Non-GAAP Financial Results
|
|
(US$ thousands,
except for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-month
period
|
|
Six-month
period
|
|
ended June
30,
|
|
ended June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
8,674
|
|
$
|
8,889
|
|
$
|
18,854
|
|
$
|
13,439
|
(1) Share-based
compensation (*)
|
|
106
|
|
|
87
|
|
|
222
|
|
|
146
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,985
|
Non-GAAP gross
profit
|
$
|
8,780
|
|
$
|
8,976
|
|
$
|
19,076
|
|
$
|
18,570
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
$
|
2,269
|
|
$
|
2,578
|
|
$
|
5,977
|
|
$
|
1,254
|
Gross profit
adjustments
|
|
106
|
|
|
87
|
|
|
222
|
|
|
5,131
|
(1) Share-based
compensation (*)
|
|
457
|
|
|
522
|
|
|
995
|
|
|
923
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
13
|
(3) Amortization of
acquired intangible assets
|
|
-
|
|
|
314
|
|
|
-
|
|
|
617
|
Non-GAAP operating
income
|
$
|
2,832
|
|
$
|
3,501
|
|
$
|
7,194
|
|
$
|
7,938
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
2,278
|
|
$
|
2,436
|
|
$
|
5,918
|
|
$
|
997
|
Operating income
adjustments
|
|
563
|
|
|
923
|
|
|
1,217
|
|
|
6,684
|
(4) Taxes on
amortization of acquired intangible assets
|
|
67
|
|
|
8
|
|
|
(211)
|
|
|
16
|
Non-GAAP net
income
|
$
|
2,908
|
|
$
|
3,367
|
|
$
|
6,924
|
|
$
|
7,697
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
2,278
|
|
$
|
2,436
|
|
$
|
5,918
|
|
$
|
997
|
Adjustments for
Non-GAAP cost of sales
|
|
106
|
|
|
87
|
|
|
222
|
|
|
5,131
|
Adjustments for
Non-GAAP Research and development expenses
|
|
217
|
|
|
420
|
|
|
463
|
|
|
770
|
Adjustments for
Non-GAAP Selling and marketing expenses
|
|
117
|
|
|
252
|
|
|
256
|
|
|
480
|
Adjustments for
Non-GAAP General and administrative expenses
|
|
123
|
|
|
164
|
|
|
276
|
|
|
303
|
Adjustments for
Non-GAAP Income taxes
|
|
67
|
|
|
8
|
|
|
(211)
|
|
|
16
|
Non-GAAP net
income
|
$
|
2,908
|
|
$
|
3,367
|
|
$
|
6,924
|
|
$
|
7,697
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic income
(loss) per ordinary share (US$)
|
$
|
0.30
|
|
$
|
0.32
|
|
$
|
0.78
|
|
$
|
0.13
|
(1) Share-based
compensation (*)
|
|
0.07
|
|
|
0.08
|
|
|
0.16
|
|
|
0.14
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.66
|
(3-4)
Acquisition-related adjustments
|
|
0.01
|
|
|
0.05
|
|
|
(0.03)
|
|
|
0.09
|
Non-GAAP basic income
per ordinary share (US$)
|
$
|
0.38
|
|
$
|
0.45
|
|
$
|
0.91
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per ordinary share (US$)
|
$
|
0.30
|
|
$
|
0.32
|
|
$
|
0.78
|
|
$
|
0.13
|
(1) Share-based
compensation (*)
|
|
0.07
|
|
|
0.08
|
|
|
0.16
|
|
|
0.14
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.65
|
(3-4)
Acquisition-related adjustments
|
|
0.01
|
|
|
0.04
|
|
|
(0.03)
|
|
|
0.08
|
Non-GAAP diluted
income per ordinary share (US$)
|
$
|
0.38
|
|
$
|
0.44
|
|
$
|
0.91
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Adjustments
related to share-based compensation expenses according to ASC topic
718 (SFAS 123 (R))
|
Company
Contact:
Eran Gilad,
CFO
Silicom
Ltd.
Tel:
+972-9-764-4555
E-mail:
erang@silicom.co.il
|
Investor Relations
Contact:
Ehud Helft /
Gavriel Frohwein
GK Investor
Relations
Tel: +1 646 668
3559
E-mail:
silicom@gkir.com
|
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SOURCE Silicom Ltd